HOT TOPIC: Odd man out?

A merchant that takes 100% of his clothes off may be considered crazy. But don't discount Malcolm Scott just yet. The portly owner of The Nudist Store selling novelties for the naked wearing nothing but sneakers, socks and a watch brought nudism out of the closet. In January, Scott opened a clothing-optional retail store in a suburban Toronto shopping center.

His public showcase of the nudist lifestyle may just be one landlord's desperate attempt to fill an empty storefront. Or is it a sign that fringe retailers are abandoning those deserted downtown buildings they bought when no one would rent to them, and heading for the suburbs?

Followers of mall trends don't foresee shoppers shielding their eyes as they pass an erotic toy shop to get to Mrs. Fields' Cookies. But some tenants on the seamier side of retail have spiffed up their image just enough to slip into strip centers that attract mainstream clientèle.

Youth trends watcher Irma Zandl, president of the Zandl Group in New York, isn't surprised by risky tenant mixes in California shopping centers. “But you won't find it in conservative Christian areas. We're seeing so much fragmentation and niche streaming (in places such as California) that finding a tattoo parlor or witchcraft store at the mall may not be that odd,” explains Zandl.

“It's going to be very difficult,” says John Williams, a retail industry consultant with Toronto-based J.C. Williams Group. “A lot of mainstream Americans abhor this stuff. Some of these retailers will slip in, but it won't get very far.”

Attracting the undesirable?

Retailer Fantasy Gifts, like The Nudist Store, is another novelty shop putting the strip back into strip malls. The chain of erotic toy stores has opened in nearly a dozen shopping centers in Minnesota and New Jersey states with less restrictive zoning ordinances, says Bob Bertino, CFO of the Minneapolis-based company.

“Fantasy Gifts sells adult sex toys to low- to middle-income couples who want to put some spice in their life,” says Bertino. Situated in clean, well-lit shopping centers, far removed from red light districts, this retailer attracts the suburban female clientèle looking for a Valentine's Day present or a VFW bowler searching for a gag gift for a teammate turning 50, says Bertino.

Fantasy Gifts' biggest leasing hurdles are: Will it attract the wrong element? What will the neighbors think? Will tenants move or not renew their leases?

That was the chance George Applebaum, the managing owner of Morelake Commons, was willing to take in 1991. As prospective tenants, the owners of Fantasy Gifts “seemed to be normal. They just had a different kind of business,” says Applebaum, whose neighborhood strip center is in Fridley, a Minneapolis suburb.

Applebaum didn't believe Fantasy Gifts would attract a peep show clientèle. To be sure, he visited a nearby store in St. Louis Park. He says he saw “Victoria's Secret” signage in the window display and “extreme Spencer's Gifts” signage in the back of the shop. The low percentage of XXX merchandise (15% to 25%) adhered to zoning guidelines. And children under 18 were not allowed in the store. So Fantasy Gifts signed a lease with Morehouse Commons, a shopping plaza on a major freeway that houses a foot doctor and a dentist, a Subway and a sporting goods store, among other tenants. Recently a childcare center joined the mix.

Applebaum kept an eye on his new tenant. “I spent quite a bit of time hanging out at our shopping center, just watching its customer draw, walking around out in the parking lot, walking from tenant to tenant. I perceived it to be mainly 25- to 40-year-old suburban females. I didn't find that was a real threatening clientèle.”

Although it has found numerous respectable sites in the past, Fantasy Gifts won't be sharing space with a Barnes & Noble in an A-range shopping center. The chain couldn't afford the high rents anyway, Bertino says. But second-generation strip centers have gingerly tossed out the welcome mat, and none have regretted it, he says. Fantasy Gifts is a profitable tenant that pays on time, Applebaum says. The store draws customers from well outside a two-mile vicinity and they cross-shop within the center.

Some adult stores are enormously profitable and can pay the higher rents, says Williams. But that won't tempt the big mall owners. Rouse and Simon, for example, have policies prohibiting such tenants. “It's a matter of taste, and it's quite subjective,” says Williams. “They want to keep their image.”

Boutique ink

It was a higher-paying teen and young adult clientèle that Lance Talon sought when he opened a tattoo shop in an upscale shopping center in Boulder, Colo., nowhere near the bohemian shops around University of Colorado.

Bolder Ink is more chic boutique than seedy parlor, a transformation made possible by the explosion of skin art in pop culture. “I used to work in a street shop and I didn't want to do that anymore,” says Talon, who plays jazz music in his shop. It wasn't easy getting into Willow Creek Shopping Center, a mixed-use development with a dentist, architectural firm, women's fitness center, a flower shop and a five-star restaurant.

Leasing agents and landlords associate tattoo shops with drunken sailors, bikers and fly-by-night operators. “Nobody wanted to rent to us in Boulder,” says Talon, who trained in fine art at the Art Institute of Chicago. “We were considered seedy and no one thought we'd pay our bills.”

“It was the biggest chance I ever took,” says Terry Palmos, vice president of Palmos Development Corp. “I didn't want to see bikers and Harleys.”

The European in Palmos took a liking to Talon's family. “I think I met his mother. He looked like he came from a nice family, not like those people hanging out in the streets,” says Palmos, who emigrated from Greece. “Only one tenant complained, an architectural firm, and they ended up getting their own building.”

Talon has since tattooed members of Palmos' family, and neighboring co-tenants. His tattoo artists do custom work in cushy private rooms. Customers drive long distances to get tattooed at Bolder Ink. Some pop in from the women's fitness center next door.

“Seventy percent of our customers are females which is atypical for tattoo shops,” says Talon. “They say ‘You’re the cleanest shop. We didn't want to get tattooed in seedy Denver.'”

Ellen Braunstein is a Toronto, Canada-based writer.

The hot zone

A booming alternative-culture youth market is blurring the lines of taste that separate large malls from strip centers. One Southern California mall has found a way to merge conservative values with youthful extremism under one large roof.

Enter The Zone at Glendale Galleria an edgy alternative for the affluent teen that's set apart, though not segregated, from the main mall. To create The Zone, a 50,000-sq.-ft. area in a 1.5 million-sq.-ft. mall was remodeled and reconfigured for different lighting and video elements, says Annette Bethers, senior marketing director for the Glendale Galleria, which is managed by Costa Mesa, Calif.-based Donahue Schriber Realty Group.

Teen retailers looking to MTV for fashion merchandise are drawn to The Zone. Hot Topic (Goth, punk and new metal-inspired clothing see related profile on page 30), No Fear (clothing developed around extreme sports) and Juxtapose (female apparel) are among the tenants.

Teens who shop in The Zone range from vampire wannabees clad in all black to average girls wearing grungy outfits inspired by new metal bands Korn and Limp Bizkit. They enter Hot Topic through doorways designed to attract teens who prefer a disquieting edge in their shopping experience. At one time gated, the newest entranceways resemble club tunnels.

Far from the “wrong element”, teens who shop at Hot Topic represent a fast-growing group with tremendous buying power, says Betsy McLaughlin, CEO of Hot Topic, which has 300 stores in mainstream malls. — Ellen Braunstein